Three Wall Street trade groups sued the U.S. Commodity Futures Trading Commission on Wednesday to stop tough overseas trading guidelines that they fear could hurt markets and reduce their profits.

The groups accused the CFTC in their lawsuit of circumventing a more rigorous rulemaking process by issuing its cross-border regulations as "guidance.''

Had the CFTC conducted a formal rulemaking, federal law would have required the agency to carry out a cost-benefit analysis to study the economic impacts of the rule and its costs to the industry, they said.

The groups that filed the suit in U.S. District Court for the District of Columbia are the Securities Industry and Financial Markets Association (SIFMA), the International Swaps and Derivatives Association (ISDA) and the Institute of International Bankers (IIB).

"The cross-border rule further creates significant financial, legal and administrative burdens on market participants that could harm liquidity and the ability of end-users to manage their risks,'' the groups said in a statement.

They also said they filed the lawsuit to stop the CFTC from what they described as an "unceasing effort'' to regulate the global swaps market through unpredictable advisory documents instead of formal rules.

Adam Jeffery | CNBC

Judd Gregg

"This action, which has been taken so far outside the bounds of normal regulatory course, ... needs to be addressed through the court system,'' SIFMA Chief Executive Judd Gregg told Reuters.

The CFTC, which is the nation's top swaps regulator, was required by the 2010 Dodd-Frank law to write dozens of new rules to bring the $630 trillion market under federal oversight for the first time.

Regulators were also instructed to determine how their rules should apply to U.S. firms that have operations in foreign countries.

The issue proved to be highly controversial, sparking a months-long, trans-Atlantic conflict with banks and European regulators who did not want firms to have to comply with both U.S. and foreign rules.

Complicating matters, the U.S. Securities and Exchange Commission, which oversees a small portion of the swaps market, has taken a different approach than the CFTC. It is pursuing a formal rule, not guidance, that will govern how its regulations will apply across the globe.

The CFTC in July gave final approval to its guidance that would let U.S. banks follow only foreign rules in some cases where they could show the regulations were roughly comparable. That is the guidance that the groups are challenging.